What is Life Insurance?

What is life insurance? A life insurance policy is a scheme wherein you invest a certain amount of your money on a regular basis, at one go or for a limited period of time in the form of premiums. On maturity of the policy, you can acquire benefits in the form of sum assured and various bonuses against the premium paid. Compare life insurance plans in India so that you get to know difference between various insurance policies that are available in the market.

Types of Life Insurance Plans in India

Different types of life insurance plans in India include Endowment Plans, Money Back Plans, etc. Some plans offer benefits like tax deduction and death benefit on the money you invest. There is a unique type of plan known as Unit Linked Insurance plan where along with life cover, your funds are linked to the market. Thus you have a chance to grow your fund value along with life cover. Insurance plans that can be bought in groups are known as Group Plans. Group plan may be of employer-employee type or non-employer employee type. Life insurance plans in India are very popular as many of them provide death benefit. This means, insurance company provides entire amount of the invested money to the dependents of the policy holder along with additional bonus (for some types of plans).

Why Life Insurance?

One might ask why life insurance? Life insurance is necessary as it offers financial protection to the dependents in the unfortunate event of death of the life insured. Also along with life cover some types of insurances like ULIPs offer options to increase your basic funds over a period of time. Some policies also includes riders i.e. in case the life insured is diagnosed with any critical illness, the insurance provider will bear the cost of medical emergencies, hospitalization, etc. Some policies also offer riders to provide financial aid to the family in case of death of the life insured due to some accident. Hence it is necessary that everyone must buy a life insurance policy.

Who can buy Life Insurance?

Who can buy life insurance? Each policy provides an answer to this question by stating the eligibility criteria. A person who fits the age eligibility criterion and who can pay premiums is qualified to buy the insurance plan. Usually life insurance policies have 18 as their minimum entry age, but some policies do allow entry ages below 18. One has to be capable of paying the decided premium amount at required frequency and this will insure his life.